RIYADH, Saudi Arabia – Saudi Arabia said Monday that this year’s budget deficit amounted to $98 billion (367 billion riyals) as lower oil prices cut into the government’s main source of revenue, prompting the kingdom to scale back spending for the coming year.

For the third consecutive year, the kingdom said it will post a budget shortfall in 2016, projecting a deficit of $87 billion (327 billion riyals).

The government said it projects expenditures of $224 billion (840 billion riyals) in 2016, roughly $5 billion (20 billion riyals) less than what the government projected in 2015.

The budget is being watched closely by investors to see how the government plans to consolidate years of heavy spending when oil prices were more than double what they are now. Benchmark U.S. crude was trading Monday at $37.46 per barrel on the New York Mercantile Exchange.

The kingdom announced projected revenues for the coming fiscal year of $137 billion (513 billion riyals), around $26 billion (95 billion riyals) less than the total for 2015. As is typical for the published version of the budget, it did not include a projected oil price.

Next year’s budget suggests Saudi Arabia is basing its revenue on a price of $26 a barrel for export crude, if production remains at 10.2 million barrels per day, said Fahad Alturki, chief economist and head of research at Saudi-based Jadwa Investment. That’s less than half the $56 per barrel priced into the projected 2015 budget.

Despite projecting it would spend $229.3 billion (860 billion riyals) in 2015, the kingdom actually spent $260 billion (975 billion riyals), in large part because of handouts King Salman doled out to the public when he ascended the throne earlier this year.

The London-based research consultancy Capital Economics said in a report issued this month that the Saudi budget takes on additional prominence because it is the first under the new monarch, who ascended to the throne in early 2015. The budget is also being heavily scrutinized as it was prepared under the guidance of a newly-formed Council of Economic and Development Affairs, which is headed by the king’s 30-year-old son, Deputy Crown Prince and Defence Minister Mohammed bin Salman.